Tuesday, May 29, 2012

5 Fundamental Finance Tasks for PMs

Your project managers are key players in ensuring that the
financial performance goals of the firm are met. PMs are responsible for
managing projects, but to be truly effective, they must also understand
the firm’s monthly financial reporting cycles and have the ability to
plan, track, and evaluate each project’s fiscal performance.

Go over this list with your PMs. This is what they ought to know and be able to do:

1. Prepare the project budget and monitor its status.
The project manager must prepare the project budget and monitor its
financial status. This includes ensuring that the information in the
firm’s management information system (MIS) is accurate and up to date.
In large firms, a project administrator may prepare the various input
forms, but the accuracy of this information remains the sole
responsibility of the PM.

2. Monitor the work done. The PM must monitor the work done or to be done. This should ensure that it is included in the authorized scope of services.

3. Seek additional fees for extra work. When work is
required outside the contract scope of services, the PM must seek
additional fees from the client. When extra work is proposed, the
project schedule must be reviewed to determine the effect the additional
work will have on it. A request for an increase in fees must identify
any required work that’s outside the contracted scope of services.

4. Get authorization for extra work. This extra work
must be identified promptly when it occurs, and the PM must notify the
client in writing. Most clients won’t pay for extra work performed
before it is authorized. The project manager is responsible for ensuring
that no unauthorized work is performed on his/her project.

5. Invoice clients promptly. The PM is responsible
for ensuring that clients are invoiced promptly and for following up on
the payment of outstanding invoices.

As you can see, the most effective and successful project managers
hold a keen understanding of the financial implications of their every
move. Whether you and your project management team just need a refresher
of the key concepts or are ready to drink from the ‘financial fire
hose', PSMJ’s popularA/E/C Successful Financial Management Seminar is a must-attend program. You’ll leave with the tools and confidence you need to succeed - register today!